KUALA LUMPUR (Dec 15): Malaysia will begin collecting a 10% sales tax on goods sold online that are priced at no more than RM500 each, starting Jan 1, 2024, ending the indefinite deferment of the new tax that was originally slated to be enforced by April 1 this year.

Prime Minister and Minister of Finance Datuk Seri Anwar Ibrahim on Dec 4 signed off on the Federal Government Gazette to fix the new enforcement date of the tax, also known as the low value goods tax. The gazette was published on Dec 8.

The tax, which was first announced in Budget 2022, is applicable to all goods sold online by registered sellers at the specified price threshold, and brought into Malaysia by land, sea or air — except cigarettes, e-cigarettes, vaping products, smoking pipes, tobacco products, and liquors.

The tax will be charged on the sale value of the goods sold, not including any tax, duty, fee or other charges such as transportation or insurance that may be related to the sale of the goods, according to a set of answers to frequently asked questions that was prepared by the Royal Malaysian Customs Department.

Registered sellers are those registered with the Customs under the provision of the Sales Tax Act 2018. Sellers of such goods should register with the Customs if the annual sales value of their low vaue goods brought into Malaysia exceeds RM500,000.

According to the Customs Department, countries such as Australia, Switzerland, New Zealand, Norway and the United Kingdom have imposed a similar sales tax on low value goods.